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How to Find the True Value Before You Put Your Austin Dental Practice for Sale

Your dental practice’s value is probably not on the forefront of your mind as you manage your practice’s day to day operations. However, there comes a time when every dentist needs to know the true value of their practice. If you are listing your dental practice for sale in Austin, or trying to prepare for retirement, you are likely wondering how much it is worth. Unfortunately, unlike a real estate comp for your house or a Kelley Blue Book value for your car, determining the true value of your dental practice takes a little investigation and a lot of experience.

There are several methods dental practice valuators use to determine what your practice is worth including using a multiple of collections, and finding earnings before interest, tax, depreciation, and amortization (EBITDA). While you don’t need to be an expert on these in order to sell your dental practice, it helps to know the basics. Below we explain what each of these methods entails.

Multiple of Collections: A Rough Estimate

When purchasing a dental practice buyers are paying, in part, for the steady stream of collections that takes years to build from the ground up. When using a multiple of collections method of valuation, your practice’s value is determined by multiplying the average of its collections from the past three years by a certain percentage. This method is relatively straightforward and can be a good starting point for those considering listing their dental practice for sale. However, there is some debate over the number to use as the multiplier. Conventional wisdom has the multiplier at 70-80%, however, in our experience, that is not always reliable and sometimes it’s too low for an accurate valuation, depending on the practice. 

Our reservations about this method go to it’s main weakness: it does not take into account any other factors that make your practice unique. For example, one owner may have worked hard to keep their overhead costs low compared to the national average, at only 55% of their annual collections. Another owner’s overhead is much higher than the average at 80%. If both practices bring in $1 million in collections each year, the first practice—with its low operating costs—is actually worth more. For this reason, we don’t use this kind of back-of-napkin estimations. Rather, we rely on a more comprehensive valuation prepared by the dental CPAs and certified business valuators at Blue & Co.

Earnings Before Interest, Tax, Depreciation, and Amortization 

Using earning before interest, tax, depreciation, and amortization (EBITDA), while more complex, provides a more detailed look at how your practice works. With the increase in group practices, entrepreneurial dentists, and outside investors, using this method has become increasingly popular. When you decide to put your dental practice for sale in Austin your valuator will want to see your debt-free earnings and use that as an assumption for future success. 

When using this method, a dental practice’s net income (or EBITDA) is divided by a cap rate, typically a number between 23-31%. The result is taken as the value of your practice. For example, a practice whose net income is $250,000 divided by a cap rate of 30% = a value of around $833,000. As you can see, because this method takes into account your net income rather than your gross earnings it results in a much more accurate picture of what a buyer can expect to take home after the sale is finalized.

What Other Factors are Important?

If you, like most dental practice owners, are saying “wait, what about my real estate?” or “what if I just bought a new x-ray machine?” we hear you. Each dental practice for sale in Austin is unique, and will bring its own tangible and intangible assets to the table. That is why it is crucial to work with experienced, dental-specific practice valuators. At DDSmatch Southwest we work closely with Blue & Co. to provide valuation reports. The experts at Blue & Co. provide a detailed, 70-page report so you can see everything that goes into determining your practice’s value. Here are a few other items that will be factored into your dental practice’s value:

  • Practice location
  • Fee Schedule
  • Referral Rates
  • Cosmetic appearance of office including how well-maintained the equipment is
  • Payer mix
  • Whether office is leased or owned
  • Transition plan
  • Community goodwill
  • Financing availability

Blue & Co. will provide the seller with a draft of their report and allow time for feedback before delivering the final version to the buyer. This report is respected by banking institutions and will give your buyer confidence moving forward with the sale. At the end of the day it is important to remember that your practice is only worth what a buyer is willing to pay for it, which is why it is so important to work with a team like DDSmatch Southwest who knows the local market.

How to Add Value Before Listing Your Dental Practice for Sale

What happens when your Austin dental practice isn’t worth what you thought it was? For dental practice owners, especially those moving toward retirement, we recommend getting your practice evaluated early in the process to give you time to increase its value. Since much of your practice’s value is determined by your net income you should focus on increasing this. How do you increase net income? 

First, look at your active patient records and think about how you can increase your patient base. Bump up, or at least maintain, your current marketing efforts to new patients, and focus on creating an environment each new patient wants to return to. Ideally you should attract 25-30 new patients per month with a 12-14% attrition rate.

Next, consider your patient fees. How often do you increase your fees or renegotiate with insurance companies? It may be worthwhile to hire a PPO advisor to help you rework your accepted plans and increase your revenue before you list your dental practice for sale. 

Finally, take a look at your overhead expenses. It is easy to fall into a certain rhythm as a small business owner, but you need to be careful with every purchase you make. If you have an office manager make it a point to sit down and discuss every expense, from your office’s electricity bill to your supply of pens. Rather than sticking with what you’ve always done, shop around for the best price. The less overhead cost your practice carries the more it will be worth when you sell. 

Retiring? Use the Practice Optimizer Experience

If retirement is less than ten years away, now is the time to start preparing your Austin practice for sale. Giving yourself ample time to prepare, both your own mind and your practice, will ensure a smooth transition when the time comes. The first step you should take is to contact the transition experts at DDSmatch Southwest. We have developed a process called the Practice Optimizer Experience to help dental practice owners retire with confidence.

Our transition experts are concerned with more than just whether or not your practice sells, we want you and your practice to continue to thrive for years to come. Using Practice Optimizer Experience we will review every aspect of your practice and your finances to determine the best time for you to retire, solidify your legacy, and fully prepare you for the future. Here is what you can expect from the Practice Optimizer Experience:

  • Conceptual Transition Experience: What do you imagine when you think about retirement? In this first step our transition specialists will help you visualize your ideal future, set achievable goals, and map out strategies to meet those goals. 
  • Trusted Valuation Analysis: Before you list your dental practice for sale in Austin you need an accurate valuation, using the method discussed above. As part of your transition into retirement we recommend two valuations, one at the beginning of the process and one when you are ready to sell.  
  • Ideal Retirement Calculation: How much do you have set aside for retirement? Unfortunately, many dentists don’t have enough money to retire and maintain the lifestyle they want. Our partners review your current and future projected income to give you a full financial picture and ensure you are on the right track for retiring on your own terms.
  • Estate Preparedness Gameplan: What will happen in the lives of those you love after you are gone? With a well-prepared estate plan you can be sure to leave the legacy you want and provide for your loved ones well after you are gone. We refer you to an experienced, local attorney who will create or update important legal documents including wills, trusts, and estates.
  • Dental Insurance Navigator: Don’t list your dental practice for sale in Austin without first reviewing your accepted dental insurance plans. Our transition experts will refer you to a PPO advisor who will take a comprehensive look at your current payer mix. Your advisor may recommend new plans to add, or suggest plans to discontinue. She will also negotiate with insurance companies, leveraging her established relationship with them so you can increase your practice’s revenue.
  • Clinical Opportunity Blueprint: There are hidden revenue opportunities in every dental practice. Using Dr. Charles Blair’s “Practice Booster Clinical Treatment Analyzer” we investigate and uncover where you could maximize growth in your practice. In this 70-page report you will find a blueprint for increasing your practice’s value so you can get the most out of your sale.
  • Critical Metrics Analysis: Your practice is always changing and evolving. As you prepare for retirement you need to be aware of every change that happens so you can make sure your practice continues to produce at high levels. We provide the customized Practice in Your Pocket Ongoing Report so you can keep track of critical items right from your phone, tablet, or workstation. In addition we will include an annual review of these findings as you work toward listing your dental practice for sale in Austin.
  • The Trusted Transition Process™: Finally, when the time comes to list your dental practice, we will start you on our Trusted Transition Process. This tried and true process ensures you know exactly what to expect from your transition. We will work to find the right buyer to carry on your legacy, and make sure you get what your practice is truly worth so you can retire with ease. Our full range of professional services and commitment to transparency means you never have to wonder what is happening with your transition.

Not Sure When to Start? Contact Us Today!

If you are like most of our clients, you probably have a lot of questions about business valuations, adding value to your practice, and when to start your transition. You don’t have to be an expert in dental practice transitions to have a successful sale. The truth is, starting the process early and working with a team of experienced professionals are the best steps you can take toward a smooth transition. We are here to help with any questions or concerns you have. We offer guidance for anyone looking for information about listing their dental practice for sale in Austin and across the Southwest. 

Just take it from our numerous client testimonials, like Dr. Bill Wolfe who explained,

It was a pleasure doing business with [DDSmatch Southwest]. You were able to sell my practice when three other brokers failed. Selling one’s dental practice and retiring from 48 years in dentistry is not an easy, painless decision, but through your guidance (and a bit of counseling too), you made it happen with a buyer to whom I feel very comfortable turning over my practice. Your professionalism was absolutely critical to the successful sale and transition of my dental practice, and I am deeply grateful.

The dental practice transition experts at DDSmatch Southwest are ready to provide you with a free, no-obligation consultation so you can start preparing for your transition, whether it happens 6 months or 6 years from today. Fill out the request form on our website or call 855-546-0044 to get started.

Why You Should Be Thinking About Selling Your Dental Practice in San Antonio

How often do you think about your dental practice’s value in the San Antonio market? If you are not selling your dental practice, or thinking about selling soon, the answer is probably never. Most dentists are focused on their practice’s day to day operations, or, at most, plans that they will implement in the next few years. Of course, there is nothing wrong with focusing on these things, as a small business owner, you need to take care of them. However, too often we see dentists who are ready to put their practice on the market, but have not done anything to prepare. This lack of planning is reflected in the value of their practice. Read below to learn how you can prepare your practice for sale, even if you don’t plan to make a career move for several years.

Why You Should Start Planning Now

What comes to mind when you think about planning to sell your dental practice? Maybe you think about sprucing up around the office, or getting your practice evaluated by a professional company like Blue & Co. There are necessary steps you need to take immediately before selling a dental practice, but there are other steps you can take throughout your career that will help you increase your value steadily over time. Read this blog post to learn more about setting goals throughout your career to increase the value of your practice. 

If you are within seven years of retirement now is the time to start thinking about your ideal transition. Keep in mind the following factors that will affect your transition timeline and when you need to start moving forward with your plans.

Local Market

Your local market will have a great impact on how long it takes your sale to finalize. Some owners are able to move quickly, like Dr. John Wells, whose testimonial reads, 

Thank you for selling my practice in record time. Do you realize that it only took four months from start to finish? Plus we got our asking price.” 

Others take more time, especially if the selling dentist has not carefully considered what they want from the sale before listing their practice. This is one reason it is essential to reach out to experienced dental practice transition specialists before selling a dental practice. Our team of transition experts offers a free, no-obligation consultation to help you determine the best timeline to list your San Antonio dental practice based on local market conditions.

Transition Type

There are a variety of ways to transition out of owning a practice including selling outright, working for a set period of time after the new dentist takes over, and dental associate buy-ins. If you choose a route that involves finding an associate to buy-in and eventually take over, you need to get started well before you intend to retire. Similarly, if you plan to stick around as an employee after the sale is final you need to work that into your timeline. If you aren’t sure what type of transition is right for you, talk to our team to learn more about each kind. There are benefits and compromises to each. Remember, DDSmatch Southwest not only helps dentists who are selling a dental practice in San Antonio, we also match associates with dentists looking to expand or find a future buyer. And, with our Trusted Transition Processyou can have confidence and clarity about the future. 

Upgrades

When you’re within ten years of selling your practice it is time to think carefully about the upgrades you make around the office. Some upgrades, like switching to digital imaging, may be worth the cost in order to attract buyers. Others won’t bring a 1:1 return on investment so close to your sale. When you’re thinking about purchasing new equipment you need to have a sales timeline in place so you can determine whether you are making a cost-effective decision. For a more in-depth look at this decision process visit our dental transition blog

Beware of Mental Retirement

We’ve all heard the old cliche, “the grass is always greener on the other side.” This saying rings especially true for those looking forward to their next phase of life. You’ve worked hard to build a thriving dental practice, and now you are looking forward to relaxing in retirement. It can be easy to get into the retirement mindset before selling a dental practice. Maybe that means reducing your hours, or taking a few extra days of vacation every year. Perhaps you instruct your staff to keep your workload light and slow down your marketing toward new patients. After all your years of hard work you deserve to reap the benefits of a well-run dental practice. 

However, there is danger when you enter “mental retirement.” Reducing your hours and seeing fewer patients will have an effect on your practice’s value when it is time to sell. Remember, the value of your practice has a lot to do with its productivity in the final few years. Just because you have built a practice with strong goodwill in the community does not mean you can leave things on autopilot.

In addition, as the owner of a dental practice you set the tone for your staff. If you have one foot out the door that will affect morale, making your office a less than welcoming place to be. Your staff and patients won’t be as excited as you are that you are selling your dental practice. Don’t let your own excitement for the next phase of your life negatively affect the practice you worked so hard to build.

If you find yourself longing for retirement and dreading work each morning it may be a good idea to move up your retirement date. Luckily for dentists in San Antonio, the market has never been better for sellers. San Antonio is one of the fastest growing cities in the United States. Plenty of younger dentists are taking note of this and choosing to plant roots in San Antonio and the surrounding areas. If you own an established practice in San Antonio your value has likely risen significantly in the past few years. To find out whether now is the right time to list your dental practice contact DDSmatch Southwest for a free, no-obligation consultation.

Assets You Should Focus on When Selling a Dental Practice

What exactly goes into determining the value of your dental practice? Whether or not you are planning for a sale in the near future you should know what assets you need to focus on to build a strong practice. Many dentists incorrectly assume the tangible assets, your dental equipment and real estate, will make up a majority of the sale price. However, 75% of your sale price actually comes from active patient records and your “brand.” 

18 months prior to getting a practice valuation, your active patient records should be high. It is well worth putting in extra time with each patient to make them feel welcome, and to ensure they return for regular check-ups. This steady patient stream will give your buyer confidence that what they are purchasing will provide reliable income from the beginning.

In addition to these records, your buyer has confidence in the purchase because of the legacy you have established over the years. Your dental practice is a staple in the community, your employees are trustworthy, and you have a reputation for providing outstanding work. That is why, when you are selling a dental practice, you need to focus on establishing your brand and leaving a tangible legacy.

Raise Your San Antonio Practice’s Value with These Tips

Oftentimes dentists ask us, “what else can I do to raise my practice’s value.” When you start thinking about selling your practice you need to make sure you are getting the true value of the work you poured into it. Our Trusted Transition Process™ provides clarity for both buyers and sellers so you can be certain you are on the right path. 

However, even if you have followed all of our suggestions above, you may notice your practice’s value is holding steady rather than rising. If this is the case you need to focus on the following factors in order to raise your practice’s value before you sell.

  • Patient Fees: When was the last time you raised patient fees? Many dentists are hesitant to raise fees, fearing they will drive patients away. However, patients know it is reasonable for your fees to increase over the years. Make sure you stay competitive in the local market, but don’t keep your fee schedule artificially low.
  • Insurance Negotiations: It is good business practice to renegotiate with your contracted insurance companies whenever possible, not just when you are thinking about selling your dental practice. If you don’t, you could be leaving money on the table. If you aren’t sure how to do this contact our office and we will connect you with a dental insurance navigator who can help.
  • Overhead: Your practice’s overhead will see ups and downs over the years as you spend on new equipment, employee salaries, and office supplies. After owning a practice for a decade or more you are probably used to these ups and downs, but that doesn’t mean you shouldn’t pay close attention to them. Shop around to make sure you aren’t overpaying for supplies, and make sure you’re keeping a reasonable budget. Too much overhead will lower your practice’s value.
  • Marketing: It can be tempting to reduce your marketing budget as you start thinking about selling your San Antonio practice. After all, you won’t be treating the new patients for very long. However, as we explained above, active patient records make up a large portion of your practice’s value. We recommend you maintain your marketing budget even as you consider selling your dental practice.
  • Office Updates: Again, as we explained above, when you are considering a transition you need to keep in mind that some office updates won’t bring a 1:1 return on investment. However, first impressions matter and making small cosmetic changes will help your practice sell faster without breaking the bank. If your practice is still sporting lime green wallpaper from 1975, it may be time to give your office a facelift.

Of course, each San Antonio dental practice has unique opportunities for increasing value. Some will be quick and easy to implement, like cosmetic upgrades. Others will take time and planning, like negotiating with insurance companies. No matter what, it is important to start thinking about and planning for your sale early. The more time you give yourself to make changes the smoother your transition will be. To find out how you can raise the value of your dental practice talk to our transition experts. 

Selling Your Dental Practice? Don’t Wait Until It’s Too Late

With the current market conditions, dental practice owners in San Antonio are making more than ever on their sales. If you own a dental practice in San Antonio now is the time to contact our dental transition experts. Even if you are several years away from listing you should start thinking about adding value to your practice before it’s too late. 

At DDSmatch Southwest our transition experts provide a clear and consistent roadmap called the Trusted Transition Process. We help dental practice owners discover ways to add value and get the most out of their sale, while maintaining the legacy they worked so hard to build. Here is what you can expect from the process.

  • Conceptual Transition Experience
  • Strategic Practice Outreach
  • Trusted Valuation Analysis
  • Clinical Opportunity Blueprint
  • DDSMatch Interview Alignment
  • Dental Advisory Connection
  • Vision Alignment Completion  

Selling a dental practice doesn’t have to be a stressful process. With guidance from our team of experts your ideal transition can become a reality. To learn more about the process and find out whether now is the right time to list your San Antonio dental practice contact our team for a free, no-obligation consultation. It all starts with a conversation!

Selling a Dental Practice in San Antonio: Planning for Your Future Starts Today

How often do you think about what your San Antonio dental practice is worth? Most dentists only consider the value of their practice when they buy it and when they sell it. In between these milestones they focus on providing care for their patients and supporting their employees. As a small business owner it is vital to focus on the day to day aspects of running a business, but too often dentists realize too late they could have been taking steps throughout their career to build value. Only when retirement is on the horizon and they start to think about selling a dental practice do they realize they should’ve started planning earlier. Fortunately, the dental transition experts at DDSmatch Southwest are here to help you prepare and prioritize for your future, even if you’re not planning to sell your practice anytime soon. Read below to learn our best tips for planning for your future.

Changing With Your Community

Most dentists stay in one office space for their entire career. Moving locations is expensive and not usually worth it unless there are extenuating circumstances. That means you will spend 30+ years in one neighborhood and community, watching it grow and change with time. The challenge now becomes adapting to your community’s demands. 

For example, if you started your practice in a San Antonio neighborhood with young families, you built your practice around serving those families. You bought equipment and designed your marketing to meet the needs of that demographic. Now, 30 years later your neighborhood has changed and you find yourself serving an older population. If you don’t change your practice’s operations to reflect this, you will lose business. Selling a dental practice becomes much more difficult when you are not in tune with your community. Your buyer will have to come in and adapt quickly if they want to keep their new practice afloat, and most buyers aren’t willing to do that. At the very least, your practice will lose value because your buyer sees how much work and money they will have to pour into the practice immediately.

Adapting to your community isn’t difficult, time consuming, or expensive if done properly and over time. In fact, you are probably already doing this in some small ways. But it is worth paying attention to your patient’s needs. Instead of repeatedly referring patients to an outside office, consider buying the equipment, or getting the training you need to serve your patients in-house. Not only will you add value through increased production and collections, you will see better patient retention. Small, incremental changes like this will help you increase your practice’s value in the long run.

Tangible and Intangible Assets When Selling a Dental Practice

You have probably heard of the two types of assets that make up your San Antonio practice’s value. Tangible assets, like the equipment you use every day, and intangible assets, like the goodwill you have in your community. Both of these asset types need to be strong for a successful business, and eventually a successful sale.

Tangible Assets

When you have practiced dentistry for 30 years or more you can get used to things being a certain way, whether it is your cracking dental chairs or the clunky software you use to bill patients and insurance companies. These tangible assets will be passed to the next owner, and many times is not worth updating right before listing the practice. However, throughout your career, you should keep an eye on these assets. Is the carpet in your office worn and stained? Are your employees waiting several minutes for their computers to start up in the morning? Keeping your equipment up to date will make a difference when you are selling a dental practice in San Antonio. 

Intangible Assets

The unique business practices you have cultivated over your career are what make your practice “yours.” Often they are the reason patients keep returning. The goodwill and trustworthiness you have with your community and staff members are intangible assets that add to the value of your practice. These factors are not things you can add to your practice at the end of your career, like updating your x-ray machine. A solid patient base doesn’t just spring up overnight, it is developed and fostered over a long time. Long-term, knowledgeable employees are also a sign of a well-run, high-value, practice. If you don’t have these intangible assets your buyer will have to build them after the transition, at which point it might make more sense for them to simply start up a practice from scratch. Start building up your intangible assets as soon as you start practicing dentistry so you can get the most out of your practice when you sell.

Write Your Handbook Before Selling a Dental Practice

One of the intangible assets your practice holds is its policies and procedures, some written and others unwritten. For example, maybe your front desk staff collects insurance co-pays and deductibles at the time of service rather than billing the patient for them later. This ensures cash flow and protects from patients falling into collections. While you may not have a written policy outlining this task, your staff and patients have come to understand it is the way your office works. 

Take some time to think and talk to your staff about these unwritten office policies, there are probably more of them than you think. From billing policies to how you remind patients about their appointments, these rote tasks are worth taking note of. Write down these “unofficial” policies so every new employee, and your eventual buyer, will know how to operate your practice and maintain its unique environment. With a solid handbook in place your employees and buyer will have confidence moving forward after you retire.

Beware the Technology Trap Before Selling a Dental Practice

One of the traps many dentists fall into as they prepare to retire and sell their practices is investing in depreciating assets too close to their sale. It is easy to put a dollar amount on technology, such as your billing software or other equipment, and think you have added that exact amount to the value of your practice. However, these assets depreciate, so even if you spend $20,000 on the latest technology you may not see your practice’s value increase by $20,000. If you are within five years of retirement, large purchases typically will not result in a 1:1 return on investment. 

Of course, there are always exceptions to this rule. For example, if you have not switched to digital imaging technology you should consider upgrading before you list your practice. Most newer dentists are not trained on older systems, which makes your practice less marketable.   This is one example why it is essential to work with experienced dental transition specialists like DDSmatch Southwest. Our experts will help you determine whether a certain investment is worthwhile right before selling a dental practice in San Antonio.

Along with overvaluing certain tangible assets, dentists tend to undervalue intangible assets. They pour time, money, and energy into building up their tangible assets, but ignore what makes their practice unique. Pay attention to your employees and patients needs, and recognize the role intangible assets take in making your practice successful.

Find Your Niche In San Antonio

Every dental practice has something special that makes it unique. When you pay attention to your employees needs, adapt to your changing patient base, and build your tangible and intangible assets, you will learn what makes your practice work well. In other words, you will find your niche in the San Antonio market. 

Why is it important to know this? When it comes time to sell your practice the right buyer will be one who fits into this niche, continuing your legacy. At DDSmatch Southwest we work hard to match the right buyer with the right seller. This is because, just like our clients, we care about what happens after you finish selling a dental practice. Our transition experts will help you identify the aspects that make your practice run smoothly, and find a buyer who is looking for a practice like yours. 

Don’t Wait Until It’s Too Late: Utilize the Practice Optimizer Experience

The earlier you start thinking about building value in your practice and creating a legacy, the smoother your transition will be. That is why we created the Practice Optimizer Experience. If you are within 10 years of retirement you need to start taking steps to prepare your practice and prioritize your future. Our transition experts will help you take care of every detail leading up to your sale, so you can retire on your own terms. Here is what to expect from the Practice Optimizer Experience:

  • Conceptual Transition Experience: Our experts will help you visualize your ideal transition and give you realistic expectations about selling a dental practice in San Antonio. This step leads to concrete strategies that will carry you forward through the end of your transition time. 
  • Trusted Valuation Analysis: In order to get the most out of your practice you need to know what it is worth now. We arrange for a trusted third party valuation before you start the process to give you insight now, and another before you sell to give your buyer confidence.
  • Ideal Retirement Calculation: How much do you need to make on your sale to retire with the lifestyle you envision? We make sure you are prepared by reviewing all of your investments, giving you a full picture of where you stand.
  • Estate Preparedness Gameplan: What will happen to your estate when you are gone? Getting legal documents in place will give you and your loved ones added peace of mind as you move forward toward retirement.
  • Dental Insurance Navigator: Negotiating with insurance companies is a vital part of running a successful dental practice. Oftentimes, our clients find they can increase revenue before selling a dental practice through negotiation with their current accepted plans. 
  • Clinical Opportunity Blueprint: Whether you know about it or not, your San Antonio dental practice has untapped potential. Using Dr. Charles Blair’s “Practice Booster Clinical Treatment Analyzer,” we identify areas of growth you can utilize to build value.
  • Critical Metrics Analysis: Your dental practice is not static, especially while you are working hard to build value and prepare it for a sale. We send regular reports on your practice to ensure you are on the right track to meet your goals.
  • The Trusted Transition Process: When you’re ready to start your dental practice transition our experts are ready to help with a clear roadmap to success. We value transparency and clear communication, so you’re never in the dark about what is happening.

Selling your practice without the Practice Optimizer Experience isn’t impossible, but we have found that dentists who work with our system are more confident about their transition into retirement. The Practice Optimizer Experience not only ensures you are getting what your practice is truly worth when you sell, it prepares you for every aspect of retirement. You can have more confidence selling a dental practice when you are certain your patients, employees, finances, family, and the legacy you worked so hard to build, will be taken care of after you leave.

Contact DDSmatch Southwest Today

Whether you implement the above suggestions early in your career, or right before you retire, you deserve to reap the benefits of the years of work you poured into your practice. Don’t leave money on the table simply because you don’t understand the process. Our transition team is made up of professionals with extensive experience in the San Antonio market. When you’re ready to start thinking about your future practice transition contact our office for a free, no-obligation consultation. 

Remember, the earlier you start thinking about retirement, the more successful your transition will be. We will help you prioritize and prepare for your future so you can retire with confidence. To contact our office today simply call 855-546-0044 visit our contact page

Finding Your Purpose Before You List Your Dental Practice for Sale in Austin

There are times in every dentist’s career when they lose sight of why they started and where they are going. In the past year of COVID-19 chaos, many dentists have considered whether or not they really want to continue working at a private practice, or if it makes more sense to sell and move on. Even with the ups and downs of the past year, now is a great time to list your dental practice for sale in Austin. But before you do, you should think about your future goals. Sit down and consider why you started your practice in the first place, what your career goals are, and what you want from your future. If you decide it is time to move on you should know that your current attitude toward work impacts your practice’s value. Learn why it is important to consider this fact as you make a plan for the future.

Looking Back to Plan for the Future

You may have started your career with specific milestones in mind, such as buying a practice by year five, expanding it to two or more offices by year 15, and retiring comfortably by year 35. Or, you could have started with the goal of simply serving your community and spending your free time with family and friends. 

Whether your goals were specific or vague, you had a plan at the beginning. Now that you own a practice, look back at your original goals and compare them to where you are now. Do you have the same goals or have you changed your desires for the future? Are you happy with where you are in your career? Most importantly, how do you feel about your practice after a long day of work? Do you feel accomplishment at the end of the workday, or are you longing to list your dental practice for sale? If you aren’t sure what you want next from your career, ask your family, close friends, and business advisors. Those close to you can help you decide if you should keep on your current path, or sell your dental practice and start down a new road.

Sometimes all it takes is a little soul searching to reinvigorate your career goals. However, many dentists realize mid-career that they are holding too closely to the goals they made as young dentists, goals they simply don’t want anymore. If you decide it is time to sell your dental practice and move on you should move quickly as the market for sellers in Austin is booming. 

Selling Your Dental Practice Now

When you decide it is time to sell your practice, what is the first step you need to take? In order to get the most out of your sale you need a team of trusted, experienced, advisors. A dental practice transition expert is key to listing your dental practice for sale and moving through the process with efficiency and transparency. If you don’t already have a dental specific CPA and attorney, contact our office for referrals. Professionals with experience in the dental industry will be invaluable as you decide when is the best time to sell, negotiate contracts, and allocate funds.

Many prospective sellers we speak to assume the chaos of 2020 has decreased the value of their practice. While every market has its unique ups and downs, we can say with confidence that now is one of the best times to sell a dental practice in Austin. The housing market in Austin and around the Southwest is growing at an unprecedented rate as the area floods with new industry and residents move in from other states. Most dental practices fully reopened several months ago and patients are rescheduling dental work they put off during the early months of the pandemic. This means production and collections are returning to pre-pandemic levels, or in some cases higher. This is great news for dentists listing their dental practice for sale right now.

In addition to the booming real estate market, now is a great time to list your practice because of the current demographics of dentists. According to the American Dental Association 21.1% of dentists in 2020 are between the ages of 55 – 64, and 16.3% are 65 years and older. In addition, the average age of retirement for dentists in 2020 was 68.2. This means a significant number of dentists will reach retirement and list their practice for sale in the next ten years. If you are considering selling your practice in the next five-to-ten years it is worthwhile to take advantage of the current market and not wait until it shifts out of your favor. 

Planning for a Future Sale in Austin

After some soul-searching you may decide now is not the right time to sell. However, even if you plan to keep practicing for five-to-ten years, it is never too early to start prioritizing your future and preparing to list your dental practice for sale. This is especially true if you are preparing for retirement. Small changes you make around your practice now can have a big impact on its value ten years down the road. The closer you are to selling your practice the more you should focus on increasing production and decreasing unnecessary costs.

If you’re planning for a future sale, check with our practice transition experts to find out steps you can take now to increase your practice’s value and make your transition as smooth as possible. Try to be flexible with your timeline so you can make the most of the Austin market while it’s hot. If you’re planning for retirement, take advantage of our Practice Optimizer Experience to ensure you get the most out of your retirement years. 

Vibe Check: How to Boost Your Austin Practice’s Value

One of the first steps in listing your practice for sale is getting a trusted practice valuation. At DDSmatch Southwest we work with Blue & Co., a group of experienced dental practice valuators. The experts at Blue & Co. provide a report to the seller, detailing everything included in the sale and what the true market value is. They also work with the seller and include important feedback before making a final draft that will be presented to the buyer. We recommend getting a preliminary practice valuation as early as possible, as there are several ways to boost your practice’s value before you list it. 

Since we are focusing on listing your dental practice for sale, we must address how your attitude toward your practice impacts its value. As a dental practice owner you set the tone for your practice, a tone that impacts your staff and patients. If you come into the office every day in a bad mood your staff will reflect that and your patients will feel uncomfortable. This ultimately leads to higher rates of employee turnover and low patient retention, all negative things when you are selling a dental practice. On the flip side, if you are excited about your work and encouraging to your staff and patients this typically results in higher satisfaction for both employees and patients. Patients are more likely to keep up with routine visits and refer their friends and family members.

So while “office environment” is not a line-item on your valuation, it does have a lot to do with your practice value. A welcoming environment will translate to higher practice valuation as patients return to a place they trust with people they enjoy being around. If you are feeling unhappy in your current career situation try to put those feelings aside so you can get the most out of the practice you built.

Listing Your Dental Practice For Sale With Our Trusted Transition Process

Whether you want to list your practice 6 months from now or 6 years from now you can benefit from the DDSmatch Southwest Trusted Transition Process. We want to help you maintain the legacy you worked hard to build, while also helping you get the full value of your practice when you sell. Our team of transition experts values clear and consistent communication, which is why we created this process. Here is what we do for you:

  • Conceptual Transition Experience: Well before your transition we help you visualize your future, strategize, and set attainable goals.
  • Strategic Practice Outreach: Using technology and a human touch we share your practice’s unique qualities with our network of pre-screened candidates, looking for the best possible match.
  • Trusted Valuation Analysis: As we mentioned above, your practice will be analyzed by a Certified Valuation Analyst. This third-party report is fair and respected by banking institutions.
  • Clinical Opportunity Blueprint: We analyze your practice to reveal untapped potential, which gives your buyers confidence for their future success.
  • DDSmatch Interview Alignment: After you list your Austin dental practice for sale, we identify potential buyers and lead an in-depth interview so you can determine who the best candidate is to take over your practice. 
  • Dental Advisory Connection: You need trustworthy advisors on your side. We connect you with local professionals like attorneys, accountants, and real estate brokers to ensure every step of the process runs smoothly.
  • Vision Alignment Completion: We work with advisors on both sides of the transaction to move everything forward with transparency and timeliness, until your vision is made into reality. 

Our Trusted Transition Process has worked for hundreds of dentists in Austin and across the Southwest because of our high attention to detail, transparent processes, and the human connection we make with each of our clients

If you are still unsure whether or not you want to sell, give us a call like Dr. Gwen Eaker did. Unsure about whether she wanted to sell, Dr. Eaker turned to our team for help,

[Randy and Andy] helped me come to grips with even just making the decision. They helped me work it through  . . . no pressure to sell it because, you know, that’s how they make money, is to sell my office. But they did not pressure me to do that. They would have helped me jumpstart it, and make it more of a success if that was the road I chose to take. They helped me decide. They were very good friends . . . I have faith in the company and I really enjoyed the experience I had with them. I mean, I would not recommend anybody else. And I’d never do it alone.” 

To read more of Dr. Eaker’s story visit our dental transitions blog

List Your Dental Practice For Sale In Austin Today

No matter where you are in your career our practice transition experts are here to help. We want to help you reach your lifestyle and career goals, whether that means you want to sell outright, take on an associate, or simply plan well for retirement. 

We work with dentists who are on a short timeline, like Dr. John Wells who told us, “Thank you for selling my practice in record time. Do you realize that it only took four months from start to finish? Plus we got our asking price.” 

As well as those who would like to take a little more time, like Dr. Bill Wolfe who explained, “It was a pleasure doing business with [DDSmatch Southwest]. You were able to sell my practice when three other brokers failed. Selling one’s dental practice and retiring from 48 years in dentistry is not an easy, painless decision, but through your guidance (and a bit of counseling too), you made it happen with a buyer to whom I feel very comfortable turning over my practice. Your professionalism was absolutely critical to the successful sale and transition of my dental practice, and I am deeply grateful.

Don’t list your dental practice for sale in Austin without contacting our transition experts for a free, no-obligation consultation. Learn why now is a great time to list your practice in Austin, how our Trusted Transition Process works for you, and what you can do to boost your practice’s value so you can get the most out of what you built. To schedule your free, no-obligation consultation with DDSmatch Southwest today visit our contact page or call our office at 855-546-0044. 

The Importance of Setting Goals Before You Sell a Dental Practice in Austin

Ideally, every dentist who owns their own practice will eventually retire and list their practice for sale. The hard work dentists put in over the course of their careers should be rewarded when they sell a dental practice. Too often, however, dentists don’t plan well or set specific goals for their career. When it comes time to retire, these dentists scramble to get their practice running smoothly in order to get the full value when they sell. One of the keys to a successful dental practice transition is setting goals early. Learn our best tips for setting goals so you can plan and prioritize your future.

When to Start Setting Goals

As a young dentist, fresh out of school you probably didn’t think much about retirement. At most, you set up a retirement savings plan and contributed part of your income to it every year. There is nothing wrong with focusing on building your practice at this point, throwing your energy into growing your practice is a good career choice. However, every decision you make, even early on in your career, will have repercussions later on when you decide to sell a dental practice. 

The American Dental Association reports the average age for dentists at retirement is 68, much higher than the average retirement age of the general U.S. population. While this fact suggests dentists love what they do and decide to work longer than those in other professions, it may also indicate something else. Many dentists nearing retirement age aren’t financially ready to retire and maintain their current lifestyle. 

Too often dentists assume the proceeds from the sale of their practice will carry them through their retirement years, without actually knowing how much money they will need. They end up making the difficult choice between reducing their lifestyle to match a lower income, or working longer than they really want to. Dentists who start to plan at least ten years ahead of their desired retirement date are able to retire on their own terms. Individuals who plan even further in advance are setting themselves, their practices, and their families up for success.    

Even if you do not plan to sell a dental practice in the near future there are goals you can set for yourself that will make a difference down the line. That is why we recommend dentists at every age sit down and think about the trajectory of their career such as whether they want to own a dental practice with multiple locations, if they want to be part of a group practice, and what age they would like to retire at. Knowing what you want out of your career can help you make a roadmap for the next five, ten, or fifteen years and more.

Setting Goals Early in Your Career

If you are still a long way from retirement, your energies are likely spent on building your practice and learning how to be a successful small business owner. Believe it or not, this actually plays a large role in how successful your future practice transition will be. When it comes time to sell a dental practice, your buyer will want to know the practice is running smoothly, patients are happy with their care, and employees are competent and loyal. More than anything though, your buyer will want to know they are buying a practice with a long standing record of goodwill in the community. 

In Austin and the surrounding areas there is a lot of competition for general dentists. According to Texas Health and Human Services there were 584 general dentists practicing in Travis County in 2020. Early on in your career you need to think about what will make your practice stand out in the marketplace, and how you can become an essential part of the community. The better established you are the more value you build. 

Early in your career is also the best time to form relationships with other professionals who can help your business. You’re a dentist, and as such you don’t need to be an expert in tax law or real estate. Hire experienced professionals like a dental-specific CPA who can guide you through important business decisions. Learn about running a small business by signing up for continuing education. Educate yourself on how to find great employees and empower them to do well. Set yourself up for success by recognizing you don’t know everything, but you can learn.

Write Down Career Goals, Sell a Dental Practice at The Right Time

Early on in your career your timeline can be flexible. For example, at 35 you may decide you will retire at 65, but when that time comes, you may decide you want to keep working another three years. The purpose of goal setting isn’t to be rigid, it is to give yourself time to do things right so you can retire on your own terms. Once you determine what your overall career goals are you should make specific goals for the next five years, ten years, and so on. Ultimately, each goal should build off the last one in order to build your practice and retire when you want.

What do we mean when we say you should make specific goals? We are talking about physically writing (or typing) your goals out so you can refer back to them periodically. Take out a notebook and pen, or open up your computer and list the goals you want to accomplish in the next five years. Do you want to open a new practice location? Hire more hygienists? Increase your production by 10% every year? Sell a dental practice in Austin and relocate? When you finish your five year goals, start writing your ten year goals, then continue on until you get to the year you want to retire. 

One thing to remember when you are creating your roadmap is to make sure each step makes sense in relation to the others. For example, five years before you plan to retire is not the best time to buy a new dental practice. By the time you are five-to-ten years away from retirement you should be thinking about getting your current practice ready to sell

In addition, each goal needs to be realistically achievable with the resources you have available. 

You may set the goal of adding additional services, but if you don’t have the training to offer these services the goal becomes achievable. If you want to meet the goal of offering additional services you need to set out a time and place to get the training you need. If you take the time to list out all the goals you have for your career, you can plan to sell your practice on your own terms.

Refer to Your Goals Often as You Plan to Sell a Dental Practice

When you have your career goals mapped out keep the list in a safe place and refer back to it yearly. Look at your next milestone and make a plan to meet it. For example, if your goal is to hire an associate, you need to make sure your practice is producing at a high enough level to take on an additional dentist. If you take steps now to increase production your practice will be ready to take on an associate by the time you planned to bring one on. 

Each time you refer back to your goals you should make sure you are still on track for your ultimate goal, selling your practice when the time comes. If you are unsure whether your roadmap is realistic and achievable talk to our transition experts. We can help you determine the right time to take specific steps such as reducing your hours or remodeling your office.

Reevaluating Before You Sell a Dental Practice

Again, the aim with setting specific goals is not to be rigid. That is why we recommend looking at your list of goals regularly. Maybe when you were fresh out of dental school you imagined owning a dental practice with multiple locations in Austin, but ten years down the road you decide you would rather slow things down and focus only on one location. There is nothing wrong with changing your mind, as long as you are the one in control. 

Reevaluating is also important to make sure you are on track for both short term and long term goals. Your goals are like dominoes, which is why you cannot focus solely on your next milestone when you take out your list of goals. You may find you need to adjust your current actions in order to meet your 20 year goals. In the example above, when you decide you want to focus on owning one location instead of multiple locations, that will have a great impact on what you do with your time and energy. In this case you need to adjust your long-term goals to match your change in direction.

Prioritizing Retirement Goals

What if you are less than five years away from your desired retirement date and you have not planned ahead to sell a dental practice? While it is never too early to start planning, it is also never too late. The first step you should take when retirement is on the horizon is to contact the dental transition experts at DDSmatch Southwest. We have created the Practice Optimizer Experience to help dentists plan and prioritize for their retirement. Our goal is to take the stress and worry out of planning for retirement by guiding you through every step and helping you build value in your practice. Here is what we do for our clients:

  • Conceptual Transition Experience: Our experts will sit down with you to discuss your desires for the transition and how you want to live after retirement.
  • Trusted Valuation Analysis: Our partners at Blue & Co. perform two analyses. One at the beginning of your journey to give you an idea what your practice is worth now, and one to provide your buyer before you sell a dental practice. 
  • Ideal Retirement Calculation: What plans do you have for life after retirement? Our partners at HK Financial Services review your investments as part of your Retirement Check-Up in order to ensure you have enough set aside. 
  • Estate Preparedness Gameplan: Retirement is about more than traveling and playing golf. Our team will refer you to an estate planning attorney to help you set up important legal documents to protect your assets.
  • Dental Insurance Navigator: Renegotiating your insurance plans can add value to your practice. Shelley DeGroff at Integrative Dental Solutions will help you review your plans for maximum profit. 
  • Clinical Opportunity Blueprint: Are there areas in your practice that could boost your growth? This analysis shows opportunities you can take advantage of to increase your practice’s value.
  • Critical Metrics Analysis: This periodic report shows how your practice is performing over time. It will help you determine how to improve production and value.
  • The Trusted Transition Process™: When you are ready to sell a dental practice in Austin our Trusted Transition Process™ provides a clear and consistent roadmap. We are committed to transparency at each step so you can sell and move on with your retirement. 

With the DDSmatch Southwest transition team on your side you will have expert help to decide things like whether to renegotiate insurance plans, what areas of your practice to invest in, and whether or not to take on an associate. The Practice Optimizer Experience ensures no detail is overlooked so you can retire with confidence. 

But don’t take our word for it, see what clients like Ryan S. have to say.

“Tremendous experience! Working with DDSmatch was so easy and they went above and beyond to help us through the entire process. Truly personalized service, super responsive and detailed. I would highly recommend them to anyone buying or selling a practice!”

When you’re ready to talk to an expert about your dental practice transition, call DDSmatch Southwest. Our team is ready to help you plan and prioritize for your future. Set up a consultation today by calling 855-546-0044.

What is the Ideal Timeline for Selling a Dental Practice in San Antonio?

There are a variety of reasons dentists decide to sell their practices. Some dentists only start thinking about selling a dental practice when they decide it is time to retire. Others want to move from a rural to an urban area, or decide to move to a new city or state for personal reasons. Whatever the reason may be, one thing holds true for every dentist planning to sell a practice: the sooner you start planning, the more successful your transition will be. But what exactly do we mean by “soon”? Your ideal transition timeline should be tailored to your specific needs before, during, and after the sale. To pin down an ideal timeline you need to know the factors that make up a successful sale. Below, we outline what factors you need to consider, and what a typical timeline is for dentists planning to sell a practice in San Antonio and the surrounding areas.

First Things First: Why are You Selling a Dental Practice in San Antonio?

As we stated above, there are several reasons dentists decide to sell their practice. We have worked with dentists who want to retire from owning their own private practice, but plan to stay active in the industry, as a consultant for example. Other dentists may decide they want to sell their San Antonio practice and buy one in Dallas in order to live closer to extended family. 

The main distinction when planning for a sale is whether or not you are planning to retire after the sale is finalized. Where will your income come from after you sell? Do you need the proceeds of your sale, combined with your current retirement investments, to carry you through the final 20+ years of your life? Or do you only need the proceeds to fund your next venture? 

Why does it matter what your next steps are? If you are selling a dental practice in San Antonio for personal reasons, your sale will likely need to line up with external factors such as selling your home or starting a new job. If you are selling before retirement you may have a little more flexibility in your timeline. While it is certainly possible to complete a dental practice transition in a matter of months, taking time to plan out your transition and build value in your practice will result in a more successful sale. That is why as soon as you start thinking about selling your practice you should contact a practice transition specialist

Variables to Consider Before You List Your Practice

Each dentist and practice has a unique set of variables that may help, or hinder, reaching their specific transition goals. Several unexpected variables need to be considered before you decide on your ideal transition timeline. Here are the variables that will impact your transition timeline.

The Value of Your Collections

Not only do your collections impact the sale price of your practice, they are an indicator to buyers of what they can expect to make after they take over. When you are selling a dental practice in San Antonio your buyer will need to know they can cover operating costs and still take home enough to support their lifestyle. The US Bureau of Labor Statistics reports, “the median annual wage for dentists was $159,200 in May 2019.” Your actual annual income will vary based on your location, specialty, overhead costs, and the ebbs and flows of the economy. In addition, newer dentists will likely have significant student loan debt. According to the American Dental Education Association the average debt for dental school graduates was $219,169 in 2019, with 39% of the graduates reporting student loan debt over $300,000. So, whether or not they are freshly out of dental school, it is highly likely that a younger dentist will have to take their student loan debt into consideration when evaluating practices to buy. Will your current take home pay support a dentist in this situation? The higher your take home pay the more attractive your practice will be to buyers, and the shorter your transition timeline can be.

Practice Location

Selling a dental practice in Alamo Heights is a much different experience than selling one Shertz, even though both locations are within the greater San Antonio area. Urban areas are more densely populated, and tend to attract more potential buyers. If your dental practice is located in an urban area you can expect a practice transition to be completed six to twelve weeks after finding a qualified buyer and obtaining a practice valuation. It is worth noting, though, that urban areas tend to have more competition for buyers and highly successful practices that may be financially out of reach for younger dentists.

Practices in rural areas typically take longer to find a buyer, up to three years in some cases. However, the economic health of your specific community will have a lot to do with finding a qualified buyer. San Antonio and the surrounding areas are growing rapidly, and suburbs that were once considered “sleepy” are now growing at incredible rates. Even if your area is still considered “rural” it may be in an up-and-coming area where buyers are looking to snatch up space quickly.

When you’re selling a dental practice in an area that is urban, rural, or somewhere in between, it is important to discuss your ideal timeline with a local broker. Someone who is experienced in dental practice transitions in your area will have their finger on the pulse of the market and can help you decide the right time to list your practice.

Retirement Age

Have you put much thought into when you want to retire? The American Dental Association found that the average age of retirement for dentists in 2017 was 68.9. If you are within ten years of your ideal retirement age it is time to start planning. A successful transition into retirement takes years to plan and involves much more than just putting your practice on the market. That is why our transition experts created the Practice Optimizer Experience, which we will discuss in more detail below. Even if you aren’t planning to retire in the next ten years it is wise to consider how your current sale could affect you down the road.

Selling a Dental Practice Without Retiring

If you are not planning to retire soon, what can you expect your transition timeline to be? Oftentimes our clients who are moving on without retiring need to sell their practice quickly because of external factors. However, this doesn’t mean you can’t get the full value of your practice, or even increase your practice’s value before selling. As soon as you know selling your practice is a possibility, contact one of our transition specialists to talk about a practice valuation. 

A practice valuation will give you an accurate record of what is involved in the sale and what the total value of your practice is. At DDSmatch Southwest we work with third-party valuator Blue & Co. for reliable valuations. Your 70-page report will give you insight not only into how much you can expect your practice to sell for, but what you can do to boost value before selling a dental practice in San Antonio. If you have the flexibility to wait a few years before listing your practice there are many things you can do to increase your practice’s value. If you only have a few months before you need to sell, talk to your transition specialist about whether there are any quick and effective ways to increase value in your practice. It is important to note that some “quick and easy” ways many dentists think will add value actually do not provide a 1:1 return on investment. For information on cost-effective ways to add value to your practice visit our dental transitions blog

Your Retirement Timeline

Even if you don’t know the exact age you want to retire at, you probably know a general range. When you first start to plan your dental practice transition you don’t need to set out specific dates for your retirement. In fact, it is a good idea to remain flexible with your plans in the early stages to make sure you get the full value of your practice. In addition, if you want to take on an associate or reduce your hours before selling a dental practice you need to plan these steps well in advance to avoid unintentionally decreasing your practice’s value.

Ten Years Before Your Dental Practice Transition

As we mentioned above, the average dental professional retires in their late 60s, which is why we recommend dentists in their 50s start preparing their practice for sale. Now is the time to take a look at the equipment and software you use and consider upgrading them. Replacing outdated x-ray equipment or billing software can be costly, and should only be done if you have the time to pay off the equipment and train your staff to use it. Bringing your practice up to date at least ten years before you sell will allow you to benefit from the upgrade while making your practice more attractive to future buyers.

Five Years Before Your Dental Practice Transition

Five years or more before selling a dental practice in San Antonio you should start focusing on streamlining your practice for optimal value. Depending on your practice’s makeup this could mean reducing specialty procedures to make your practice as mainstream as possible. Look at each aspect of your practice and consider whether you could make it more efficient. If you haven’t already, make the switch to a digital filing system and digital x-ray equipment. While these upgrades may be expensive you need to start thinking about your future buyer. Younger dentists won’t know how to use outdated systems and are less likely to choose a practice that will require them to learn or pay to upgrade them.

Two Years Before Your Dental Practice Transition

At least two years, but as many as five years before you plan to sell, review your fees to see where you can raise them and find ways to increase your patient base. Research comparable procedures in your area and consider setting your fees in the 80th percentile. Avoid adding new, specialty procedures, as you will not have time to gain the skill and experience needed to be competitive before you retire. 

Remember, when you are selling a dental practice in San Antonio you are selling much more than just the equipment. Now is the time to make sure you have qualified staff in place and that they are paid fairly. Too much turnover is a red flag to potential buyers, while hyper-inflated salaries will reflect lost value. Look at the local job market to make sure your staff’s income reflects their qualifications, abilities, and loyalty.

With a few small exceptions, the time for upgrading your office is over. Focus your efforts on small cosmetic improvements, such as repainting, but avoid larger office remodels. Your goal now is to make a good first impression on your patients and future buyers.

Time To List Your Practice

With the time and effort you put forward over the last ten years, selling your practice should be a breeze. Your dental transition specialist will guide you through the final steps of selling your practice, including getting a reliable practice valuation and connecting you with a dental specific attorney and CPA. 

Practice Optimizer Experience

A lot goes into preparing for retirement and selling a dental practice, which is why we created the Practice Optimizer Experience. When you take advantage of these services you can be sure no detail will be overlooked and you can retire on your own terms. The Practice Optimizer Experience includes important steps such as an Ideal Retirement Calculation, Estate Preparedness Gameplan, Dental Insurance Navigator, and Clinical Opportunity Blueprint. Learn more about how we help dentists in San Antonio and beyond prepare, plan, and prioritize for the future by visiting our webpage here.

Contact the experts at DDSmatch Southwest today to learn more about successful dental practice transitions in San Antonio and across the Southwest. 

How an Accurate Post-COVID Valuation Can Help You Sell Your Dental Practice

You’re probably tired of hearing how 2020 and 2021 are “unprecedented” or “unpredictable” but the truth is we are sitting in a much different place than we were a year ago. Most dental offices are up and running again, but with stricter guidelines for how daily operations are run. Patient load in some offices is low as they strive to reduce the number of patients in the waiting area at the same time. More of the practice’s budget is dedicated to protective equipment and sanitization. 

If you are looking to sell your dental practice in Austin you may be asking yourself, how does this past year affect my valuation? Higher costs and lower collections in 2020 can’t be a good thing, can it? The good news is, every dental office in your market was affected equally by the pandemic and industry experts have developed strategies to find fair and reliable valuations. Find out how valuations have changed in the past year, and what this means for your practice.

What is a Business Valuation, and Why Does it Matter?

If you’re new to dental practice transitions you should know a business valuation is one of the most important documents you need as part of your transition. During the purchasing process the seller provides a business valuation that details every financial aspect of the practice. This document gives the buyer confidence, and is respected by banking institutions for lending purposes. 

Matt Howard, a Senior Manager at the consulting firm Blue & Co., performs hundreds of dental practice valuations each year. Before you sell your dental practice, an experienced valuator like Matt will walk you through the process. “My core value is helping you as a seller or as a buyer truly understand what is the market demanding for a practice that you’re looking at or you own today.” explains Matt. The valuators at Blue & Co. are, “trying to take the emotion out of it, trying to just really come in as that third party that gets paid exactly the same amount for every business valuation . . . and truly help you understand what is a fair price from both a buyer and a seller perspective for the practice.”

Do all business valuations work this way? Unfortunately, says Matt, the answer is no. “There’s some other entities out there that set their own prices, and it’s a one pager, and you have no idea how that value is determined.” Without a detailed report like the one provided by Blue & Co. sellers and buyers are left in the dark about what makes up the sales price. “That is not how I like to handle the process.” Matt says. When you sell your dental practice you should have a full picture of everything used to determine its value. At Blue & Co., Matt explains, “we have a very full valuation, 60 pages or more depending on the practice, that helps detail exactly how we arrive at the value. Again, transparency and intentionality is something that I love to bring to a transaction.”

How Dental Practices Were Affected By COVID-19

While COVID-19 shutdowns were not identical in time or length throughout the nation, it is safe to say every practice was affected in some way. Matt explains, “most parts of the country had some impact in March, April, and May, typically the months that we’re seeing where obviously we were either shut down for a period of time or all of that time.” 

But, as Matt points out, these three months were followed in most areas by a strong come-back, which is important when you are trying to sell your dental practice. “What I’ve seen over and over again, and I probably worked on 200 or so valuations since the closure, is we came back very strong in most cases . . . So we had three or four months of just better numbers than most practices have seen in general in their entire existence. And that’s that pent up demand, the industry trying to make up for two lost months or three lost months depending on where you’re at in the country.” 

In a normal year an individual practice showing ups and downs like this would be concerning from a valuation standpoint. It may indicate poor practice management, or something else going on beneath the surface that a buyer should be aware of. How are business valuators handling these COVID-19 related ups and downs? “In the end,” says Matt, “we have all these ups and downs in the integrity of the data, and it’s just going to make for a lot more looking at that data and making sure that whatever we use in our valuation is really the expectation of what is going to continue on in the practice post-COVID.”

Sell Your Dental Practice With an Accurate Post COVID-19 Valuation 

A typical business valuation pulls financial data from the past year in order to predict what your future practice earnings will be and create an appropriate value. “We are taking each month, and the profit and loss statement is basically the revenues minus the expenses, and that shows the profitability of the practice” says Matt. However, since 2020 was a year with so many ups and downs, how do valuations take this data and extrapolate? As Matt pointed out above, valuators are looking closely at the data and setting realistic expectations for how the practice will operate in 2021 and beyond. 

Here is how Matt explains the new process of finding an accurate value before you sell your dental practice in Austin: “we are trying to get each month of data for all of 2020. And that way what we can do is we can parse out those months that were most impacted by COVID. And . . . let’s say all three months were a wash for your practice, March, April, and May. We’ll take those out, take those three months out, and either tack on some of 2021 that we already have finalized, or going back into 2019 and adding on maybe November and December of that year. That way we can have 12 full months of data without the craziness of those two or three months.”

Overall, Matt explains, there is a continuity to how practices in certain markets shut down and reopened, which helps valuators determine what the true value of a practice is without the interference of COVID-19 shutdown data. “From a valuation component, I feel like the valuations, again, are substantially similar to what they were pre-COVID,” says Matt. “As long as the practice has shown that it was either proportionally down based on the amount of closure, or even some have been completely intact in 2020.”

Maintaining Value Before You Sell Your Dental Practice

The past year has been difficult, leading many dentists to wonder whether they should cut back their hours, take an extra few days of vacation, or retire earlier than planned. “I think that COVID has been an instigator for practice transitions.” says Matt. “I think some people woke up and realized ‘I have to figure out when my exit point is’ and maybe it’s sooner than later based on what’s going on in the world.” 

Before you take certain steps, we recommend thinking about how it will affect your practice’s value. Right now most practices are ramping up production and collections, and in some cases surpassing even their 2019 numbers. “In the end, 90% of the practices that I’ve looked at have either been proportionally down or even better than they were prior to 2019,” explains Matt. This is great news if you are planning to sell your dental practice in the near future, and a good reason to keep your numbers strong. 

Matt cautions dentists not to fall into a “slow fade” transition. As Matt explains, a “slow fade” happens like this: “It was a $1 million practice in 2017, and every year [they take] a couple more weeks of vacation, maybe trim a day, hours, maybe stop really pushing some of the dentistry that they think should be done. And at the end of the day, it ends up being a $700,000 or $600,000 practice by the time that we look at it, and that slow fade absolutely impacts the value of the practice.” 

As the practice owner you want to get the full value of your practice when you sell. Most dentists will still have that $1 million valuation in mind, not realizing the steps they took over the past few years had such a big impact. Again, Matt explains, “If it’s a $600,000 practice and it was a $1 million practice four years ago, that doesn’t matter as much to [the buyers]. They look at it as a $600,000 practice and so do the banks.”

The lesson here is that if you want to sell your dental practice in Austin you should worry less about the several months of lock-down and restrictions during 2020, and more about maintaining and increasing your value in 2021. “Sellers are still out there.” says Matt. “I do think [COVID] has been a big instigator to get a lot of them engaged. And again, I do think we’re in the sellers’ market still.” 

However, Matt also cautions that the market could flip in the next few years based on the current demographics of dental practice owners. The American Dental Association reports 37.4% of dentists are over the age of 55. This means that the market may soon flood as these dentists near retirement. “We do have older owners of dental practices, just based on the baby boomer generation [who] still owns the majority of practices.” says Matt. “So there will be a lot of activity over the next ten years or more as the baby boomers do exit practice ownership from a general perspective.”

Sell Your Dental Practice with the Experts

When you’re ready to put your practice on the market how do you learn about the process, avoid mistakes, and get the most value out of your investment? The experts at DDSmatch Southwest and our partners are here to help. One of our top priorities in every transition is transparency. We want both buyers and sellers to know exactly what to expect, be comfortable asking questions, and feel confident in the process. 

When it comes to your business valuation Matt and his colleagues at Blue & Co. take the same approach, “I mean, jumping on the phone with [the sellers] and helping them understand what the value is and how I got there and here’s the things that we consider.” explains Matt. “And they can ask questions, and sometimes they have their CPA on the phone too. And that CPA will ask questions. Again, there’s nothing to hide here. We’re trying to make it completely above board transparent, open and honest about everything that went into the valuation and how the value was determined.”

At DDSmatch Southwest we provide a Trusted Transition Process that allows you to sell your dental practice with confidence. This clear and consistent path will take you from thinking about your ideal transition to completing a successful sale. If you are 3-7 years away from retirement we recommend working with our experts to get the most out of your life’s work with our Practice Optimizer Experience. This program will walk you through everything you need before retirement, including an Ideal Retirement Calculation, Estate Preparedness Plan, Dental Insurance Navigator, and more. We will guide you through your final years of owning a practice so you can move on to the next phase of your life confidently.

Even with the ups and downs of the past year, now is one of the best times to transition your dental practice. As Matt pointed out above, you do not need to be concerned if a COVID shutdown affected your practice’s production in 2020. Take advantage of the current sellers market and contact DDSmatch Southwest for a consultation. Get started by visiting our contact page or calling 855-546-0044 today. 

Key Elements of Selling a Dental Practice in San Antonio

There are ups and downs to every dentist’s career, but no matter what, that career is more than just a job or a way to make ends meet. Dentists who own their own dental practice pour their life’s work into building a thriving office, managing the staff, and taking great care of their patients. That is why selling a dental practice can be a bittersweet time. It is more than just a practical decision, it is personal and wrapped up in the emotion of letting go of something you were a part of for twenty, thirty, even forty years. At DDSmatch Southwest we know selling your practice can be stressful, and we are here to help the transition move as smoothly as possible. What is the first step to a stress-free transition? Knowing the elements that make up a successful sale. Read below to learn how you can prepare yourself and your practice for a transition, whether you need to sell next month or ten years from now.

Knowing the Process Before You Start

Think about the major milestones in your life and how you prepared for them. For example, before starting dental school, you had an idea which courses you would take and how long you would be in school. But you did not know how difficult each course would be or the exact number of hours you would need to study. In the same way, while you cannot predict the specific details of selling a dental practice in San Antonio, it is important to know what you are getting yourself into. Learning how a typical practice transition works, and what common mistakes you can avoid, will keep you from being blindsided, stressed, or confused by the process.

We recommend working with dental-specific experts. If you already have a CPA, or you plan to use your friend as an attorney, you may be asking if you really need a “dental specific” expert. Unlike listing other items for sale, putting your dental practice on the market requires expertise that not everyone has. Reading online articles or books about selling dental practices will only get you so far. And you don’t want to pay for anyone else to try and learn it as they go. What you really need before putting your practice for sale is a team with expertise in the local market to guide you through the process. Here is a little more about each expert we recommend working with before and during your transition.

  • Dental CPA: A CPA who has worked with other dentists in managing their practices and, especially, during their transitions will be an invaluable resource as you navigate the selling a dental practice in San Antonio. Things like asset allocation and business valuation will have a huge impact on you for years after your sale is finalized, especially if you are planning to retire and live off the proceeds of your sale. Learn more about how dental CPAs can help by reading our dental transitions blog.
  • Dental Attorney: A dental attorney will help you draw up legal contracts, negotiate certain terms, and generally make sure everything that happens during a transition complies with legal standards. A dental specific attorney will have experience helping buyers and sellers, and can raise a red flag if anything in your transition is out of the ordinary or concerning. For more information on how dental attorneys can help with your transition read our interview with dental lawyer David Cohen.
  • Practice Transition Specialist: Also known as a dental practice broker, a practice transition specialist is the key to a smooth and stress-free transition. Brokers connect buyers to sellers and move the process along from start to finish. Experienced brokers have seen every type of sale and can help you avoid common industry mistakes and pitfalls.

With your team of experts, the process of selling a dental practice in San Antonio does not have to be unknowable, or surprising. For DDSmatch Southwest clients, the Trusted Transition Process provides a clear and consistent roadmap, with the right amount of flexibility to accommodate your individual situation. To learn more about this process visit our website or contact us.

Setting Goals for Your Future Transition

After you familiarize yourself with the process of transitioning a dental practice, and gather a team of trusted professionals, it is time to set your goals for the future. Goal setting takes a fair amount of introspection, but also includes talking about what you can realistically expect from a sale. What kinds of goals do you need to set? When we bring this up to our clients, three of the biggest issues are: how much do they need to make from the sale, what type of transition is ideal, and when is the right time to list the practice.

How Much Do You Need to Make?

Whether you have a specific dollar amount in mind, or simply a range, it is important to think about how much you need to make before selling a dental practice. The amount you make on your sale will impact how you live after you sell, whether you are putting the proceeds toward buying a practice in a new city, or using it as part of your retirement. Of course, this number will vary based on your individual circumstances. To determine how much you need take a look at your personal finances as a whole, especially if you are planning for retirement. Sit down with your dental CPA and financial planner to discuss your current investments, expenses, and goals for the future. Do you plan to travel during retirement? Are you moving to a more expensive city and purchasing a dental practice there? For dentists planning their retirement we recommend taking advantage of our Practice Optimizer Experience. This program will take you through the steps of planning for a successful retirement, including an Ideal Retirement Calculation. For more information about planning well before retirement visit our blog post here.

What Type of Transition Do You Want?

It may sound like a simple question, but “what type of transition do you want” is actually complex. Before selling a dental practice in San Antonio you must answer questions like:

  • Do you want to sell your practice quickly, to the highest bidder? 
  • Are you concerned with continuing your legacy, even if it means passing up the first offer? 
  • Are you looking for a partner who will eventually take on the practice? 
  • Do you want to reduce your hours before selling or keep them the same until retirement? 
  • Do you want to stay on for a period after the sale, and, if so, for how long?

These questions are just the tip of the iceberg when it comes to setting goals. Talk over your ideal transition with your team of experts and they will help you create a timeline. For example, if you want to bring in a partner who will eventually take over the practice you need to start that process well in advance of your intended sale date.

When is the Right Time to Sell?

Do you have an exact time in mind, such as next October, or a range, such as sometime in the next 3-5 years? The right time for selling a dental practice in San Antonio is based on multiple factors like:

  • Are you financially ready to move on, or do you need to add value to your practice before selling?
  • Is there an external factor compelling you to sell before you thought you would?
  • Do you have an “ideal” timeline in mind already, such as retiring by the age of 65?

One of the most important things you can do when determining the right time to sell is to make sure you are mentally and emotionally ready. As dental lawyer David Cohen explains

“I’ve dealt with some sellers in the past that think they may be ready to sell, and they’re not. And it ends up being time-consuming for all parties involved . . . If they can do the best they possibly can to begin with, really do some soul-searching and make sure they’re ready to sell. I think that’s extremely important before they start paying legal fees and spending their own time and money, and also other people’s time and money.” 

Planning Ahead When Selling a Dental Practice in San Antonio

The final element of a successful sale is proper planning. It is never too early to start thinking through your ideal type of sale and gathering your team of experts. A good rule of thumb, though, is to start planning five years before you intend to sell. This is especially important for dentists moving toward retirement. Unfortunately, many dentists nearing retirement haven’t saved enough to maintain their current lifestyles.

For this reason we recommend getting a practice valuation at the beginning of your journey. Practice valuations are typically thought of as the report you need to provide the buyer, detailing what is included in the sale and giving a true and fair value. However, practice valuations can be helpful to dentists preparing their practice for a sale because they show what you can expect to make on your practice if you sell now. Taking information from the report you can determine whether you are financially ready to sell, take on an associate, reduce your hours, and more. If your practice valuation is lower than you expected, knowing earlier will give you time to build value before selling a dental practice, and help determine the areas where you can improve.

Our transition experts work with third party valuator Blue & Co. to provide fair and reliable reports. Each 70 page report provided by Blue & Co. details every financial aspect of your practice, taking into account years worth of data and trends to determine a fair market value. Matt Howard, dental CPA and certified business valuator, explains, “our job in this process is to really help really work through the practice financials, the historical financial statements, and just basically help sanitize or normalize the numbers as we see them [so] the true operations of the practice are reflected.”

Oftentimes dentists are surprised when they receive their initial report, not realizing what a big impact they can have on their practice when they choose to reduce their hours, spend more on marketing, hire additional hygienists, and more. After taking a look at your practice valuation you can make an educated decision when it comes to things like hiring an associate. Again, Matt Howard explains, “Every practice has a limited amount of resources, of ops, of time for the staff to not hit overtime. So there’s a lot of variables at play here.” This is one reason why we advise that, five years before you plan on selling your practice, make sure you are using all of your resources to build value.

Selling a Dental Practice in San Antonio? Contact the Experts

As you can see, a lot goes into selling your dental practice, and the earlier you start preparing the more successful you will be. Familiarizing yourself with the elements of a successful sale is just the beginning. However, you shouldn’t need to be an expert in the market to complete a successful sale. All you need is the right team to guide you through the process.

At DDSmatch Southwest you will find just that. Our experienced brokers have completed many sales throughout Texas and New Mexico, always focusing on helping buyers and sellers have as smooth a transition as possible. With our Trusted Transition Process you don’t have to worry about details falling through the cracks. 

If you’re thinking about retirement ask about our Practice Optimizer Experience. This program was created for dentists who are 3-7 years away from retiring and selling a dental practice. It helps dentists prepare for retirement by completing important steps like preparing your estate, evaluating insurance, and building value in your practice. Our experts can also help identify areas of your practice that are underutilized in order to take advantage of growth opportunities.

Whether you are ready to put your practice on the market today, or you just want more information about the elements of a successful sale, contact the experts at DDSmatch Southwest. During your consultation we will help you determine your goals for the future and map out a successful practice transition. Visit our contact page or call 855-546-0044 to get started today. 

Cost Effective Ways to Build Value Before You Sell Your Dental Practice

Owning your own dental practice is more than just a job. As a small business owner you care for patients, pour your time and energy into building your practice, make day-to-day business decisions, and manage employees. When it comes time to sell your dental practice, how do you know you will reap the benefits of the time you poured into the practice? Unfortunately, many dentists in Austin don’t think far enough ahead and make small mistakes that end up costing them big when it comes time to sell. When you’re five years away from selling your practice it is time to start thinking about building value in your practice.

Investing in Your Practice Before Selling

There are two extremes when dentists think about preparing their practice for sale in Austin. The first is to pour as much money into the practice as possible, with the idea that they will get it back, and then some, after the sale. These individuals remodel their office, buy new dental chairs for every exam room, upgrade their digital equipment, revamp their websites, and more. This approach can easily cost tens of thousands of dollars. These doctors are not likely to recoup this investment when they sell their practice.

The second extreme we see is to do nothing. Dentists who have been practicing in the same office for 30 years do not want to bother upgrading anything just a few years before they retire. Why waste money upgrading your billing software and training your staff when the next owner might switch to a different system right away? These dentists will likely see less interest in their practice and may not get what they could have from the sale.

So, which is the right way to go about things? The answer is: neither. After over 20 years in the dental industry, our team of transition experts has seen it all. The truth is, most dentists will land somewhere in the middle of these two extremes. No matter what, it is a good idea to get a preliminary practice valuation to see what your practice is worth now, and learn how you can increase that value before you sell. Our team works with the valuation experts at Blue & Co.  to provide fair and reliable practice valuations. Learn more about what goes into this report by visiting our dental transitions blog. If you’re just getting started, there are a few low-cost ways to upgrade your practice and get the most out of your sale.

Replace Your Handpieces Before You Sell Your Dental Practice

Despite the wide availability of electric handpieces, Dental Economics reports less than half of dentists use them. Dentists who still use air-driven handpieces often ask what the advantages of switching to electric are, considering the cost to upgrade. While making this switch certainly isn’t a “must have” for every dental office, we think the advantages outweigh the cost most of the time. Here are just a few ways you and your patients will benefit:

  • Torque: Electric handpieces provide consistent, and higher, levels of torque when compared to air-driven devices. This allows for smoother and more efficient work. Not only will your patients appreciate this, it will allow you to work more quickly and increase your patient load (increasing your production and, therefore, the overall value of your practice).
  • Noise and Vibrations: While dentists are used to the noise and vibrations of air-driven handpieces, many patients are made uncomfortable. In addition, the chattering caused by air-driven handpieces can produce a less efficient cut. Electric handpieces are more comfortable for the patient, and provide a smoother cut. Happier patients are more likely to return, and a stable patient base is integral to practice valuation.

If you are considering purchasing a new handpiece before you sell your dental practice in Austin, look into electric handpieces. There are plenty of models to choose from, with varying price levels and features. When you’re looking for the right model consider the attachments included, how much the model weighs, and how much maintenance it requires. 

Electric handpieces are relatively inexpensive, but they can add great value to your practice, which is why we recommend this upgrade for many dentists. Increased comfort and efficiency will mean higher levels of satisfaction from patients and a greater number of patients served. Both of these factors will increase the value of your practice. Still unsure if new handpieces are worthwhile? Check out Dental Economics in-depth review of the pros and cons here

See the Difference with an Intraoral Camera

Much like electric handpieces, intraoral cameras can add great value in terms of patient satisfaction. In addition, they aid in establishing a trusting relationship between patient and provider, whether you are just getting your Austin practice off the ground or are ready to sell your dental practice. 

During an exam, you and your team take note of areas that need extra attention, but your patients must simply take your word for it. Established patients typically have no problem with this, but newer patients might be more skeptical. An intraoral camera shows patients much more than they can see in a handheld mirror. With the help of an intraoral camera your patients can see exactly what you see, lending increased legitimacy to your recommended treatment plan.

In addition to seeing things like cavities, intraoral cameras can be used for patient education and increased buy-in when it comes to routine dental care. Show your patients the spots they tend to miss when brushing and flossing. Use pictures to document your patient’s progress over time so they have evidence of how routine dental care, or lack thereof, impacts their oral health.

At this point you may be asking, as a dentist with a well-established practice, why do you need this upgrade? If you’re planning to sell your dental practice in the next five years you need to make sure that you are growing, and your patient retention rate is high. With the help of an intraoral camera your current and new patients will have increased confidence in you, be more likely to comply with your treatment recommendations, and recommend you to their friends. All of these factors lead to an increase in production which boosts the value and attractiveness of your practice.

Give Your Practice a Fresh Face

How long have you practiced at your current location? For Austin dentists preparing to retire and sell their practice the answer could be 30 years or more. During that time funds were likely directed towards things like upgraded equipment and marketing campaigns rather than a new coat of paint or updated decorations. And, as long as the wallpaper is not starting to peel and there are no unsightly stains on the carpet, that was not a problem. However, when you are preparing to sell your dental practice in Austin you should try to think both like a patient and a potential buyer. 

We typically do not recommend remodeling your entire office, but small cosmetic upgrades can be a good investment. If you’re having trouble deciding what needs to be upgraded around your office try this simple exercise. Park in the patient section of the parking lot and imagine you are arriving for your first appointment. How does the outside of the building look? Curb appeal is important, even for dental offices. Enter the waiting room and sit in the chairs. Are they sagging or cracked? Does the paint or carpet have stains? Does the waiting room feel welcoming? Continue through the office taking note of the sights, smells, and atmosphere. Recruit your office staff and hygienists in this exercise as well, they will likely have an opinion if asked. A few small upgrades will go a long way in making your office feel more inviting, without breaking the bank. 

Making the Switch to Digital Before You Sell Your Dental Practice

The use of an x-ray machine is invaluable in dentistry, and technology in this area has come a long way in the past decade. However, not every dentist has changed with the times, and a significant number are still using outdated x-ray machines. Many dentists who are nearing retirement do not see the point in upgrading to digital radiography. Between the cost to install a new system and the learning curve for the dentist and staff it simply does not seem worthwhile. 

While these arguments are valid, what they fail to recognize is that digital radiography isn’t just the future of dentistry, it’s the present standard. Younger dentists have not been trained on older x-ray machines. They will be less likely to buy a practice that has not been updated to digital technology as this will require that they either learn quickly how to use the older system, or immediately invest in a new system. Investing in digital technology is not inexpensive, but in most instances it is worthwhile because it increases your practice’s value, and makes it much more attractive to buyers. 

What to Avoid Before You Sell Your Dental Practice in Austin

As we mentioned above not every investment in your practice is worthwhile when you are preparing your practice for sale. Large equipment purchases, other than making the switch to digital, typically do not bring a return on investment. Unless your equipment is malfunctioning or your software is out of date to the point it is unusable, we recommend holding off on replacing it.

Our best piece of advice for dentists preparing to sell their practice is to avoid making rash decisions. Think through the usefulness of each purchase, consider whether it will add value in the short term, and ask for the advice of your dental CPA and practice transition specialist. Making the right kinds of updates, like those mentioned above, will add tremendous value to your practice. Some updates we recommend avoiding before you sell your dental practice are:

  • New Furniture: Too often we see dentists replacing perfectly good waiting room furniture or dental chairs simply because they are the “wrong color.” Unless the furniture is broken, stained, or frayed, most buyers will not care or notice if you replace them.
  • Billing Software: Your office staff is used to a certain flow, and even if a new billing software promises more efficiency, there is always a learning curve. Slowing down collections in order to train your staff is not useful when you are trying to build value in your practice. That said, if your software is so out of date it is difficult to use, it may be a good idea to replace it.
  • Anything that Provides Long-Term Value: Plenty of equipment in your dental office is made to last a decade or more. This is great when you are first starting out, as your cost per use goes down over time. However, if you are making a large equipment purchase and planning to use it only for the next three years until you sell your practice, it does not make sense to buy.

Market-Driven Decision Making

When you are planning to sell your dental practice in five years or fewer, it is a good idea to invest in your practice in practical, cost-effective ways. Your goal should be to increase production, decrease overhead, and make your practice as appealing as possible to buyers in your area. This is why it is so important to work with a team of experienced professionals including a dental CPA, dental attorney, and dental practice transition expert. Your team will help you determine which upgrades are worthwhile, and which are a waste of money and time. 

One of the biggest factors in determining which upgrades are worthwhile is your local market. Dental practices in Salado will not have the same needs as practices in downtown Austin. In fact, it might make sense for one of those practices to remodel their office, while the other practice only touches up the paint. Working with a transition expert is key to determining the needs of your specific practice.

If you are considering selling your dental practice in the Austin area, or anywhere in the Southwest, contact the practice transition experts at DDSmatch Southwest today. With over 20 years in the industry we can help you determine which steps will add the most value before you sell your dental practice in Austin. Set up a consultation by visiting our contact page or calling 855-546-0044. 

4 Tips For Dentists Selling a Dental Practice Before Retirement

One of the best things about owning your own dental practice in San Antonio is knowing you have the power to choose how your career progresses. You decide when the time is right to plan a future transition, take on an associate, selling a dental practice, and retiring. Knowing this, you may assume that many dentists choose to retire earlier than individuals in other professions, reaping the benefits of a lucrative career. However, according to the American Dental Association, the average age of retirement for dentists was 69 in 2017. Not only is this more than the U.S. average retirement age of 63, it is an increase from 2001 data which found the average dentist retiring at the age of 65

There may be several reasons for this, one being that dentists love the work they do and choose to practice longer. According to U.S. News & World Report dentistry is in the top 10 best jobs in part because of the high salary, low stress, and great work-life balance. Another reason dentists might retire later may be that they aren’t financially ready to retire and maintain the lifestyle they have become accustomed to. Many dentists are not aware that in order to retire they will need to save a significant amount of money in addition to the money they will get from selling their practice. 

How do you ensure you land in the camp of dentists who can retire when they want? Between your current investments and selling a dental practice in San Antonio you should have enough money to carry you through your final years living the lifestyle you want. Retirement success isn’t something you stumble into, it is something you plan carefully for. Read our tips below to learn how you can start preparing today to retire on your terms.

Tip #1: Look at Your Lifestyle

The ADA reports, “The average net income for dentists in private practice in 2019 was $204,710 for general dentists and $343,410 for specialists.” This income is far above the U.S. average net income of just over $51,000 in 2019. These numbers likely come as no surprise to most dental professionals, but it is important to point out that a larger average income likely means higher average expenses. 

There is nothing wrong with having higher expenses, in fact you should be able to enjoy life both before and after retirement. However, make sure you account for all your expenses when planning for retirement. Think about both the lifestyle you currently lead and your retirement goals. Will your current investments and the profits from selling a dental practice allow you to do things like travel, eat out, and live comfortably during retirement? Or will you need to scale back your expenses in order to make your money last? It is important to note that retirement could last 25 years or more. If you do not have enough money set aside to maintain your current lifestyle and retire in the next few years you need to determine what your priorities are. Do you want to cut back your expenses so you can retire sooner, or work longer than you planned in order to put aside more for retirement?

These are obviously very personal and individualized decisions and should be made with the help of an experienced financial planner. At DDSmatch Southwest we encourage our clients to review their investments regularly, especially as they move closer to retirement. As part of our Practice Optimizer Experience we partner with HK Financial Services to perform a Retirement Check-Up. The experts at HK Financial Services will review your investments and projected future income in order to help you plan and time your retirement, including when selling a dental practice makes the most sense. This Ideal Retirement Calculation can be done in tandem with your current financial advisor, or simply as a supplement. Either way, it is important to get a full picture of your financial situation well before retirement so you can retire on your own terms.

Tip #2: Know How Much Your Dental Practice is Worth

You probably know how much money you have in your checking and savings accounts, what your investments are worth, and how much your home is appraised for. But do you know how much your dental practice is worth? Your dental practice may represent a large portion of your net worth, and will impact how much money you have to live off of during retirement. For that reason, it is almost impossible to make a retirement plan without an accurate estimate of your dental practice’s value. Unfortunately, many dentists nearing retirement rely too heavily on their practice’s perceived value without actually knowing what that value is. When it comes time to sell they are left with a smaller nest egg than they thought.

How do you get an accurate picture of your practice’s worth? Selling a dental practice in San Antonio involves more than just calculating the average of the practice’s collections in the past few years or finding the value of the equipment included. Our business valuation partners at Blue & Co. provide clients with a 70 page report detailing every financial aspect of the practice. They review specifics and ask questions such as, why did your marketing expenses increase by 10% in one year? Did that 10% increase result in an increase in revenue? In a post-COVID market it is especially important to parse out these financial details. Sterilization costs likely went up in 2020, while patient loads were down. However, as the industry recovers, your costs should follow a predictable curve. An expert valuation will account for situations like this. For more information on how practices are valued post-COVID visit our dental transitions blog. 

Our Practice Optimizer Experience recommends dentists who are planning to retire in the next five to seven years have two valuations performed. The first valuation at the beginning of your journey will show you what your practice is worth right now. Getting a clear picture of your practice’s worth well in advance of selling a dental practice in San Antonio is helpful for several reasons. 

  • You and your financial advisors can use the information to more closely estimate your net worth, and determine whether or not you are on track to retire on your timeline. 
  • If your practice is not valued as highly as you would like you can use the valuation to set growth goals. The transition experts at DDSmatch Southwest use Dr. Charles Blair’s “Practice Booster Clinical Treatment Analyzer” to uncover your practice’s unused potential and maximize growth.
  • You can use your valuation to plan out how much you need to work before retirement. Taking steps such as reducing your hours or adding an associate will affect your practice’s value, and you need to make sure your practice is prepared for the changes.

Then, when you feel you are ready to list your San Antonio practice, it is time for the second valuation. This valuation is what will be presented to your buyer. The valuations performed by our partners at Blue & Co. are accurate, fair, and trusted by banking institutions. For more information about what goes into your valuation contact our team of transition specialists.

Tip #3: Your Roadmap to Selling a Dental Practice

Once you know how much money you need in order to retire on your terms, and what your practice and investments are worth, it is time to make a roadmap. First, if you do not already have a team of dental transition experts in place it is time to gather them. Your team should include a dental CPA, dental attorney, and practice transition specialist. These experts will guide you during the final years of your career, helping you make decisions that will benefit you in retirement. For example, your team may help you determine whether buying new equipment for your office will result in a return on investment or just wasted money. 

When you have a team of trusted advisors in place you need to answer some important questions about how your final years will play out. A few things you need to review are:

  • If you do not have enough money to retire when you want, how can you add more to your nest egg?
  • Are you looking for a buyer who will pay top dollar or are you more concerned with maintaining the legacy you have built after selling a dental practice?
  • Do you want to take on an associate to cover some of your patient load while you make a gradual exit? Your advisors will help you determine whether your practice is financially able to carry another dentist and how that will affect your current lifestyle.
  • Is there a date you must sell by? How flexible are you with your timeline?
  • If you need to increase your practice’s value before you sell what are the best ways to do so, and when will you need to start these processes in order to get the best return?

As we mentioned above, DDSmatch Southwest partners with HK Financial to help our clients plan out their financial future. The experts you work with will help you map out your ideal retirement, giving you steps to make that dream a reality. Do you want to travel more after you retire? Buy a vacation home? Help your grandchild pay for dental school? If you do not have a big enough nest egg to support your ideal lifestyle your financial advisor should help you determine how much you need to put away in order to meet your goals, in addition to your current investments and the proceeds from selling a dental practice in San Antonio. 

A dental CPA is also invaluable in this process, as they will give you information on the tax benefits of certain retirement accounts, investments, and more. During the process of selling your practice your dental CPA will advise you on asset allocation, which determines how much of the money from the sale you actually keep. If you do not already have a CPA who works specifically within the dental industry talk to one of our transition experts for a referral.

Planning at least five to seven years ahead of your intended retirement date will give you more control over your career, allow you to finish well, and leave the legacy you intend. With the right team in place you can be sure your interests are being promoted at every turn. A detailed, yet flexible retirement roadmap will allow you to move confidently toward retirement knowing no details are overlooked. 

Tip #4: Contact Dental Transition Experts Before Selling A Dental Practice In San Antonio

How far away is retirement for you? The earlier you start planning for retirement the easier it will be to transition on your own terms. Even if you are just starting your career in dentistry you should be thinking about the future and putting money away for retirement. If you aren’t sure where to start, or if now is the right time, contact the DDSmatch Southwest transition experts. Our team works with dentists at every stage, but we offer a special experience to those transitioning into retirement. Our Practice Optimizer Experience was developed for dentists who are within 3-7 years of retirement. Your transition experts will walk you through these steps, ensuring no detail is overlooked.

  • Conceptual Transition Experience
  • Trusted Valuation Analysis
  • Ideal Retirement Calculation
  • Estate Preparedness Gameplan
  • Dental Insurance Navigator
  • Clinical Opportunity Blueprint
  • Critical Metrics Analysis
  • The Trusted Transition Process

Our job at DDSmatch Southwest is to ensure a smooth transition for everyone involved. We know that for dentists moving into retirement there is a lot of stress involved with selling a dental practice. We are here to take some of that stress away through planning, preparing, and prioritizing for your future.

Whether you are ready to list your San Antonio practice today, or the process is still years away, we are here for you. Request a consultation with our dental transition specialists by visiting our contact page or calling 855-546-0044.